An interesting little statistic popped up over the weekend in terms of how Rockstar Games did business in the United Kingdom during 2019. According to TaxWatchUK, a new report from 2019 shows that the company cleaned house with £37.6 million (about $48.9 million) from tax cuts. Here's a little info from the report on how they got there.
The claim relates to the production of the next edition of GTA, rumoured to be scheduled for release soon. This is clear because the company has not registered any other games as being 'Culturally British', the pre-requisite required to qualify for the relief, since GTA V. Studios are able to make interim claims for VGTR before a game is completed, and the huge claims being put in by Rockstar are likely related to the production costs of GTA VI. As VGTR is related to production spend, the large claim indicates the scale of Rockstar's next release, which is likely to cost far more than the $137m spent on GTA V.
When VGTR was introduced, the government estimated that the new relief would cost in the region of £35m a year, and support smaller games developers. The scheme is now costing in excess of £100m a year, with close to half of all relief being claimed by just four companies.
Figures published by HMRC on all Video Games Tax Credit claims show just how large Rockstar's share of the pot is. In 2018-19 there were 345 VGTR claims for a total of £103m.1 While these numbers may change, as companies have a period of one year to submit returns and another year to amend a claim, evidence from previous years suggest that the total claims are unlikely to change much from the published figures. The share of this pot going to Rockstar North, which was already significant, has increased from 18% in 2018 to 37% in 2019.
It's an interesting way to make a hell of a lot of money by not defining yourselves properly. We'll see if these new findings force any change in the wat VGTR is handled in the future.